(d) Answer the following questions by describing the budget curve and indifferent to determine consumer choices according to questions. • See question no 1 (b), what is the consumer choice solution optimal for the case, if x and y are nomal goods. Draw the curve. • See question no.1 (e), what is the consumer choice solution optimal for the case, if x and y are normal goods. Draw the curve.
(d) Answer the following questions by describing the budget curve and indifferent to determine consumer choices according to questions. • See question no 1 (b), what is the consumer choice solution optimal for the case, if x and y are nomal goods. Draw the curve. • See question no.1 (e), what is the consumer choice solution optimal for the case, if x and y are normal goods. Draw the curve.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 3SQP
Related questions
Question
Please answer Only question 1 D no to answer 1 A, B, C
Transcribed Image Text:1. Answer this part of the question with Steps
Answer the following questions with the answer to T or F. If T write
only T, if F write F and you give the reason why S.
(a) Optimal consumer choice will occur if the value of MRS and
the ratio of the prices of the two goods is equal to 1.
Answer the following questions by writing down the budget equation
and drawing the curve according to the questions.
(b) Given that the price of good x is 25 / unit, the price of goods y is
20 / unit. The individual's income in period 1 is 1000. At
the second period the individual's income has increased
20% and there is a 10% discount on the price of goods
purchase of goods after 5 units of goods x. Budget line drawing
before and after changes in income and prices.
(c) Given that the price of goods x is 25/ unit, the price of goods y is
20 / unit. The individual's income in period 1 is 1000. At
the second period the individual's income has increased
20%, the price of goods y is subject to tax at 20% / unit.
Draw budget lines before and after changes in income
and that price
Transcribed Image Text:(d) Answer the following questions by describing the budget curve
and indifferent to determine consumer choices according to
questions.
· See question no1 (b), what is the consumer choice solution
optimal for the case, ifx and y are normal goods.
Draw the curve.
• See question no.1 (c), what is the consumer choice solution
optimal for the case, if x and y are normal goods.
Draw the curve.
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